No-one needs this intervention by Boris

The Adam Smith Institute is very disappointed by the Conservative Party’s proposed changes to state aid rules that take the United Kingdom in an interventionist direction. Matthew Lesh, Head of Research at the Adam Smith Institute, says:

“We shouldn’t free ourselves from the European Union in order to just enslave ourselves to the whims of Whitehall. The British people are sick of massive corporations, who have close connections with the government, getting huge handouts at the taxpayer’s expense.

“Weakening bailout rules is hugely disturbing. A Conservative government should not be promising to use taxpayer money to subsidise failing industries. Making a profit is a proof of the value added to society, and there must be no business that is too big to fail. Boris should support individuals to build skills and safeguard their futures, not entrap them in old industries.

“Promoting the “local economy” in procurement and having a “buy British” rule for state bodies is a form of Trumpian protectionism. The local economy does best when government wastes the least. If it’s better to procure goods or services overseas then that means more to spend on frontline services at home.

“Britain must not go backward, but onward into a competitive global future.”

For further comment, or to arrange an interview, please contact Matt Kilcoyne via email matt@adamsmith.org, mobile 07904099599, or landline 02072224995.

London Uber ban is a total disgrace

The Adam Smith Institute has today slammed TfL’s announcement that it is stripping Uber of its license to operate in London.

The ASI’s Head of Research Matthew Lesh said:

“Labour Mayor Sadiq Khan’s decision to strip Uber of their operating licence on spurious grounds is a total disgrace. He has sided with the vested interest of Black Cabs — who want less competition — over the interests of all Londoners. 

Uber provides thousands of jobs for low income and immigrant Londoners. It provides a much-loved service to get people home safely at night. It is more affordable than other cabs and provides a flexible working life for drivers. 

Today’s decision is a reminder of the risks of the anti-competition and anti-innovation mentality of Jeremy Corbyn’s Labour Party.”

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).

Conservative Party Manifesto: A robust manifesto but more work to be done to boost the economy

The Adam Smith Institute has today responded to the Conservative Party Manifesto announcement.

The manifesto is robust, but there is more work to be done to boost our economy, the ASI’s Head of Research Matthew Lesh says:

The Conservatives should be congratulated for a robust manifesto that lowers national insurance, seeks to revise business rates, and commits to not increasing income tax.

Creating ten free ports will help boost some of Britain’s left behind areas with lower taxes and less cumbersome red tape — an approach that should ultimately be taken nationwide. Free trade deals will help boost Britain's economy and deliver lower priced, high quality products for consumers. It is also welcome to see a commitment to ensure regulation is “sensible and proportionate” and “using our new freedom after Brexit to ensure that British rules work for British companies”. Abolishing Section 40 of the Crime and Courts Act 2014, which requires media outlets to pay costs even when they lose cases, is a welcome move for free speech. The introduction of safe standing will ensure football fans have more choice while keeping patrons safe.

But overall, this will not be enough to turbocharge Britain’s economy, or address the ballooning size of the state and long-run issues. Splashing out taxpayer money — albeit at a much more sensible scale than Labour — will do little to solve structural issues and raises questions about fiscal responsibility. The NHS needs more than higher spending, but fundamental structural reform and the embrace of a European-style insurance model for those who can pay. To improve the standard of our schools we need more parental choice, not simply more funding. 

The recommitment to the so-called “Green Belt” and Help to Buy will do little more than throw fuel on the fire of the housing market. Cancelling the planned corporate tax reduction will discourage investment and job creation and will make it harder to unleash Britain's potential. The substantial increase in the minimum wage will mean fewer jobs and less hours, particularly for those will fewer skills, the young and minorities. While embracing nuclear, hydrogen and fusion has the potential to provide substantial low-cost, low-emission energy, the moratorium on fracking will hamper efforts to fight climate change with transitional energy sources.

Support for skills throughout people’s lives is much-needed in this era of rapid technological change - this should be spent on experimenting with different models of retraining, relocation and cash payments to find out what works for different individuals and communities. The Conservatives should also be looking to reform taxes to encourage investment and cut red tape that is strangling business. 

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).

Corbyn's little red book carries a big price tag

Following the release of Labour's manifesto this morning Matthew Lesh, Head of Research at the Adam Smith Institute dives into the manifesto and finds the costs go beyond the costings, and the divisive language used at the launch gives lie to the claim that Corbyn will bring the country together:

“Jeremy Corbyn’s little red book is the most backwards-looking, self-destructive manifesto in Labour’s history. Tens of billions of pounds in higher taxes will scare away entrepreneurs and red tape that will strangle business of all sizes. Everyone will be poorer. Labour is on nobody’s side.

“A higher income tax rate on the rich will scare away job-creating entrepreneurs, higher corporate taxes will discourage businesses from locating and starting in the UK, taxing capital gains and dividends will discourage investment in our economy. Ending tuition fees will mean the poor subsidising the university education of the rich and successful. Rent controls will close our great cities to new occupants with decade-long waiting lists, and discourage house building. Mass social housing will see people stuck in their local area paying rent to landlord Corbyn for their whole lives while crowding out private building that’s just starting to pick up. Scrapping Universal Credit, without any plans for an alternative, will cost billions and encourage welfare dependency. Nationalising everything from the postal service to broadband will cost hundreds of billions, destroy the value of your pension, and lower the quality provided.

“Labour’s industrial relations plans could take us back to the days of double-digit unemployment. The ‘four day work week’ means forcing people to work less and earn less income. Introducing sectorial collective bargaining will leave everyone at the mercy of unions, leaving workers with less choice and fewer job opportunities. Banning ‘zero-hour contracts’ will leave millions of workers with less flexibility at work and threatens Britain's jobs miracle of the past decade."

For further comment or to arrange an interview please contact matt@adamsmith.org, ring 07904099599 or 02072224995.

Liberal Democrats Manifesto: A jump to the left on economics, says ASI

The Adam Smith Institute has today responded to the Liberal Democrats Manifesto announcement.

The Adam Smith Institute’s Head of Research Matthew Lesh said:

“It is disappointing to see the Liberal Democrats becoming increasingly anti-enterprise, promising punishing taxes, more red tape, and higher state spending. The formally orange book is turning into a tinge of dark red.

"While there is welcome news on refugees and drug liberalisation, focusing on harm reduction not punishment, the Liberal Democrats economic policies will hurt Britain’s prosperity. Increasing corporate taxes, forcing workers on boards, and scrapping permitted development rights that have allowed high streets to thrive with more residents, will make us all poorer.

“Seeking to change the purpose of business away from shareholder value will reduce accountability and empower state regulators -- undermining the dynamic free market that allows the country to deliver world class public services.

“The commitment to tax tech companies and create an impractical payment for data will scare away tech entrepreneurs from setting up shop in the U.K. The Uber-riding, Deliveroo-eating generation will be disappointed proposed rules to discourage the sharing economy and flexible work.”

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).

The Adam Smith Institute responds to the annual CBI conference

The Adam Smith Institute has today responded to speeches at the CBI’s annual conference.

Responding to Boris Johnson’s comments on tax changes at the CBI annual conference, Matt Kilcoyne of the Adam Smith Institute said:  

“The Conservatives plans to reduce National Insurance and urgently review business rates are welcome moves - however, the abandonment of the corporate tax cuts are a retrograde move that cedes ground to socialists as they seek power in next month’s election. 

“Corporation tax is a particularly poor way of raising government revenue. By taxing capital, the government deters firms from investing in their workforce, lowering productivity and wages — nearly 60% gets passed onto lower wages. Britain suffers from a productivity puzzle, and businesses have held back investment already thanks to uncertainty over the Brexit deal. The last thing the economy needs is a tax rate that deters investment. 

“Business rates may stir passion on the campaign trail, but the evidence just isn't there to support a review. A review will find what the last six reviews found, that the system is working well for the treasury. The real problem with business rates is that they fall on property and not land. Any improvement to a shop or pub simply sees an increase in the rate payable and this deters investment. As it stands, any rate cut will just translate into higher rents. A cut in business rates is a subsidy and a sop to landlords.”

In response to Jeremy Corbyn’s remarks, Matt Kilcoyne said:

”Corbyn has come out with warm weasel words about a decent society to those gathered at the CBI's annual conference. But the Labour leader has forgotten that a decent society is not one where the government expropriates private property, nor one where politicians can pinch hundreds of billions from your pension pots through nationalisations and equity grabs, nor is it one where government racks up unsustainable debts that undermine the economic stability of the country.

"Anywhere and everywhere that has tried Corbyn's style of socialism has seen economic collapse and the ruin of the nation. The cost of Corbyn is too much for this country."

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).

Adam Smith Insitute slams Labour's plan to nationalise broadband

The Adam Smith Institute has today slammed Labour’s costly, ill-thought out proposal to nationalise broadband in the United Kingdom.

Matthew Lesh, Head of Research at the Adam Smith Institute, says Labour’s plans would be disastrous for the country:

“Nationalising broadband would be a total disaster for the British people. It will cost tens of billions, lower service quality and leave millions waiting longer for the rollout of high speed fibre internet and 5G. We shouldn't have to call up Jeremy Corbyn every time the internet goes down.

"The Government shouldn't be paying for a service that the vast majority of us can afford. There are so many other more pressing priorities for taxpayer funds like schools, hospitals and police.

“The key issue in broadband is a lack of competition. The last thing we need is a costly government scheme that will scare away booming private sector investment from companies. Just today TalkTalk put on hold the announcement of plans about FibreNation, a multi-billion pound project to invest in fibre. Labour’s plan will be turning back the clock to a time when Britons had to wait months for a phone line connection from the post office.

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).

Time to prioritise needs not numbers in immigration

Following the news that the Government has committed to an Australian-style points-based immigration system while scrapping the cap on numbers of migrants, Daniel Pryor welcomes what should be seen as a liberal shift on migration:

Good riddance to a bad policy. The never-achieved net migration target was a relic of a flawed approach to migration that prioritised numbers over needs.

The Government seems to have recognised that ending EU freedom of movement will require a more liberal approach to non-EU immigration. In recent months, we've started to see a move towards more sensible policies, from the welcome reintroduction of the post-study work visa to making it easier for those living abroad to come and work for the NHS.

In light of economic reality and changing public attitudes, the Tories must double down on this progress. A good place to start would be pushing through Boris' amnesty proposals and letting asylum seekers work. Both of these measures would boost the economy, prevent exploitation, cut crime and encourage integration.

To arrange an interview or further comment, please contact Matt Kilcoyne via email (matt@adamsmith.org) or phone (07904099599).